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Jan 26, 2019 at 1:02 PMJan 26, 2019 at 1:02 PM

After effectively handing other school districts $150 million in Volusia tax dollars over 15 years thanks to a punishing state funding formula, lawmakers are toying with the idea of changing the method that’s made Volusia and Flagler school district officials miserable.

A House panel this week began delving into the arcane and — depending where your children go to school — controversial system for divvying up money among the state’s school districts.

The issue focuses primarily on determining how much it costs to hire teachers and other school employees in various parts of the state. A price-level index, which is calculated to try to represent those costs, is part of a broader formula that lawmakers approve each year to distribute money to districts. It’s the basis for the district cost differential — the source of Volusia and Flagler’s woes.

But the index has long faced scrutiny, with questions about whether it benefits some districts at the expense of others. Lawmakers included $100,000 in this year’s budget to hire a consulting firm to conduct a study, and House PreK-12 Appropriations Chairman Chris Latvala, R-Clearwater, said the House will examine the issue.

“I think it’s something the House is certainly looking at and will be studying,” Latvala said Thursday after his panel heard a presentation on a report by the consulting firm, the Balmoral Group.

Latvala said that anytime lawmakers change the funding formula it will affect school districts, but that the House doesn’t want to pick “winners and losers.”

[OUR VIEW: Restore fairness to school funding]

But that’s exactly what Volusia and Flagler officials feel is happening with the current system. When the state applies the DCD, districts with higher costs of living get more than $1 in funding for every tax dollar they send to the state. Districts with lower costs of living get less.

Volusia gets 96 cents for every dollar, where the median household income is $43,800; Flagler gets 97 cents, with a median income of $51,000. Districts like Sarasota and Collier get $1.01 and $1.04, respectively, and have median incomes around $60,000.

This year, Volusia lost $10 million — enough for a 3 percent pay raise for every district employee. Flagler lost nearly $3 million.

For this reason, Volusia Superintendent Tom Russell said the district is delighted that an independent study was conducted, and that there’s some movement on this issue.

“For years, Volusia County Schools has advocated for a study to be conducted to determine the appropriateness of a formula that was developed over a decade ago,” Russell said in an email. “This is indeed a step in the right direction and we are hopeful that continual progress throughout this legislation will be made to help ensure that school districts will be funded equitably.”

The funding disparity has been particularly frustrating in recent years, as Volusia struggles to make its goal of becoming an A-rated district but remains at a B in part because it doesn't measure up to better-funded districts in a variety of ways that put its students at a disadvantage.

The history

The broader school-funding formula, known as the Florida Education Finance Program, takes into account numerous factors in distributing money and totals about $21.1 billion this year. Those factors range from enrollment numbers to student transportation.

But debates about the costs of hiring school employees have flared over the years and were particularly controversial in 2003 and 2004 as then-Senate President Jim King, R-Jacksonville, spurred changes in the calculations. The changes benefited some school districts and caused financial hits for other districts.

A key part of the changes involved factoring in the presence of “amenities,” such as proximity to beaches, in looking at where people want to live and how much they are willing to accept as wages. Some beachfront school districts like Volusia and Flagler have long argued that they have been penalized by factoring amenities into the equation.

It's what prompted then-chairwoman of the School Board Melody Johnson to lead a renewed charge to change the funding formula two years ago. She traveled around the state to make other school boards and lawmakers aware of how Volusia was being penalized.

Material presented to the House panel Thursday by the Balmoral Group said the “working hypothesis” of the price-level index is that the “variables chosen in the formula are accurate predictors of wages across all counties.” But the consulting firm also offered an alternative hypothesis that raised questions about factoring in amenities.

“The approach assumes all teachers have the same preferences for the same levels and types of amenities,” the alternative hypothesis said. “While each year’s predicted index model may be unbiased from a statistical standpoint, it is unclear that the process does not consistently bias certain counties above or below the average year on year.”

New legislative session

With the annual legislative session starting March 5, it remains too early to know whether lawmakers will make changes. Also, Senate Appropriations Chairman Rob Bradley, R-Fleming Island, pointed Thursday to a move by lawmakers in the current year’s budget to help narrow funding gaps among districts.

That move involved providing about $56.8 million in additional money for districts that in the prior year received per-student funding that was below the state average — a move known in education budget circles as a “compression” adjustment.

[READ MORE: Shortchanged for years, Volusia, Flagler schools find some relief with new state funds]

It gave Volusia an extra $4.2 million last year, and Flagler an extra $1 million. In both cases, it was less than half of what the district lost to the DCD. Volusia’s Chief Financial Officer Deb Muller said at the time the move was "not making us whole."

“On the Senate side, we’re always interested in making sure that educational dollars are apportioned in an appropriate and fair way across the state," Bradley said. "I thought that there were some inequities in the system before last year, and I think compression funding went a long way towards addressing those inequities in a positive manner.”